Earlier this year, Mike Wall of eXp Realty/EZ Sell Homebuyers bought a run-down multifamily property in East Dayton, OH.
“Over the next few months, I invested in a complete overhaul: new plumbing, electrical work, fresh paint, updated kitchens, and a security system to give tenants peace of mind,” says Wall. “The property went from being a neighborhood eyesore to one of the most desirable rental units on the block.”
What happened next was “almost unbelievable,” he adds.
“Within a week of listing the units, I had multiple applications for each one,” says Wall. “Young professionals, small families, and even a few retired couples—all eager to move in. I was able to secure tenants at rents that were 20% higher than market projections, purely because of the demand and the quality of the renovations.”
Wall’s story proves that when it comes to investing in real estate, certain areas offer a magical combination of affordability and high demand, which can be windfalls for mom and pop investors who don’t have tons of money to lay on the line.
Dayton, OH, took the No. 1 spot among the Realtor.com® 2024 Top Markets for Investors, which shows where real estate investments can be highly lucrative at an accessible price point.
“The top investor markets each offer investors a unique combination of advantages, but in general, these are affordable markets that see considerable buyer demand and low rental vacancy,” says Realtor.com® senior economic research analyst Hannah Jones in her report.
Why Dayton is an investment cash cow
Dayton, a midsized city in Southwestern Ohio, boasts a low median home price—$239,000—which has been below the national average of $427,000 over the past year.
“Investors can take advantage of low prices and capture strong demand in the area,”
says Jones. “The rental vacancy rate in Dayton was just 4.7%, on average, in the first two quarters of 2024, much lower than the national average of 6.6%.”
Indeed, savvy investors have noticed Dayton’s investment appeal, with investors making up 13.7% of buyers in the first quarter of 2024.
“Dayton has attracted significant buyer demand over the last year,” says Jones. “Conveniently located roughly an hour from both Columbus and Cincinnati, buyers and renters can take advantage of relatively affordable housing and a robust local economy within close proximity to other popular markets. Investors can capitalize on the market’s proximity and affordability.”
Here’s a roundup of the latest data on where affordability and demand create a perfect opportunity for investors.
What makes a good investment opportunity
The U.S. housing market has experienced its share of turbulence over the past few years, with home prices hovering near record highs and mortgage rates remaining stubbornly high.
While these conditions have led to challenges for investors in many regions, certain pockets of the country detailed in these Realtor.com rankings are proving to be opportunities for those looking to capitalize on real estate investments.
“Each of these markets boasts above-average listing viewership, coupled with some combination of low, but growing, home prices and improving inventory levels,” says Jones.
In the top 10 markets, investors can find properties priced at an average of 21.7% lower than the national average.
While the influx of demand is driving home price appreciation—another boon for investors—overall prices remain low enough to keep the typical monthly mortgage payment below the U.S. average of $2,100.
“Climbing home prices in these markets signal sustained buyer demand, and relatively low home prices mean the typical monthly mortgage payment is lower than the U.S. average,” adds Jones.
These markets aren’t just cheap—they’re also popular. The average rental vacancy rate in these areas was just 4.8% so far in 2024, well below the national average of 6.6%.
Many investors are already taking advantage of these favorable market conditions. An average of 13.8% of buyers were investors in the top investor markets in Q1 2024, 1.0 percentage point below the national average, but an average 4.4 percentage points higher than in 2019.
“New investors will want to consider demand, price, and expected payoff when selecting where to purchase an investment property,” says Jones.
Midwest and Northeast markets shine
The mighty Midwest nabbed five spots on the top 10 list, while the Northeast claimed four spots.
“Some low-priced metros in the Midwest and Northeast have seen sustained buyer demand and still-climbing rent prices, creating opportunities for investors,” says Jones.
These regions aren’t just about low costs, they’re also about smart investing for the future.
The South and West see investment falling
Rounding out the top 10 is the only market in the South to crack the list, Knoxville, TN.
The South, once a top investment area during the COVID-19 pandemic, has fallen victim to its success.
“Over the last few years, buyer demand has softened due to affordability challenges and inventory, including rental inventory, has climbed,” says Jones. “As a result, once-popular investor markets in the South are considerably less appealing.”
Western markets remain challenging for investors due to high home prices in the region. However, Fresno, CA, and Albuquerque, NM, did crack the top 50 markets for investors, coming in at No. 25 and No. 33, respectively.
“For investors looking to buy in the West, these areas could offer opportunities,” says Jones. They are relatively affordable markets with strong demand and price growth over the past year.
While investing in a property could require significant time investment alongside the financial investment, “in the long term, investing in a property to rent out can provide the owner with a relatively low-maintenance, stable source of income,” adds Jones.
Curious about where you can invest in the real estate market? Here’s a look at the hot spots for real estate investors are largely due to their combination of affordability and sustained buyer demand.
1. Dayton, OH
Median list price: $239,000
Typical monthly housing payment: $1,200
This three-bedroom, 2.5-bathroom condo, which is listed for $224,900, has a garage and a deck overlooking a rear yard with mature trees.
2. Rochester, NY
Median list price: $265,000
Typical monthly housing payment: $1,300
3. Cleveland, OH
Median list price:$241,000
Typical monthly housing payment: $1,200
This three-bedroom, one-bathroom bungalow is listed for $219,900 and is near shops, restaurants, and major highways.
4. Pittsburgh, PA
Median list price:$246,000
Typical monthly housing payment: $1,200
5. Knoxville, TN
Median list price: $469,000
Typical monthly housing payment: $2,300
This two-bedroom, one-bathroom home for $305,000 is an affordable investment property.
6. Albany, NY
Median list price: $424,000
Typical monthly housing payment: $2,100
7. New Haven, CT
Median list price: $408,000
Typical monthly housing payment: $2,000
This three-bedroom, 1.5-bathroom Cape in the desirable Fair Haven Heights neighborhood of New Haven, CT, is for sale for $325,000.
8. Buffalo, NY
Median list price: $266,000
Typical monthly housing payment: $1,300
9. Grand Rapids, MI
Median list price: $409,000
Typical monthly housing payment: $2,000
This historic three-story home with nine bedrooms and 1.5 bathrooms needs restoration and is for sale for a $385,000.
10. Columbus, OH
Median list price: $381,000
Typical monthly housing payment: $1,900
By Margaret Heidenry
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